How timeshares work; Buying a holiday home


Timeshares are a form of ownership or right to use a particular property or properties, such as a holiday villa, apartment or cabin for a set period of time. You can buy timeshares in Australia or overseas but be aware they are a long term commitment and can be difficult to sell.

High pressure sales techniques can sometimes be used by promoters to get you to sign up on the spot. Here are some tips on what to look out for when buying and selling timeshares.

How timeshares work

There are two types of timeshare schemes.

  1. Specific time period schemes – These give you the use of a specific property for a given time period such as one week a year.
  2. Points-based schemes – Where you buy points (or credits) that you can redeem at a number of resorts or holiday accommodation properties in various locations.

Timeshare schemes, also known as ‘vacation or holiday clubs’ or ‘timeshare intervals’, vary in price depending on the amount of time or points purchased and other factors such as the location and standard of available accommodation.

With points-based schemes, the number of days you can redeem each year will depend on how many points you have, the time of the year you use them and the location and type of accommodation. Some points-based timeshares let you redeem points for other travel services.

It may cost you more to buy time or use points in peak periods such as school holidays or around public holidays. Most timeshares have a calendar, suggesting the best times to buy, and any special offers.

2019 ASIC report on timeshares showed many consumers felt that they were not getting the expected value from their membership. Consumers had experienced financial stress because of unexpected changes to timeshare membership fees, or in some cases, to their personal circumstances.

Swapping or banking time

If you buy a timeshare but don’t plan to use the property within the specified period, you may be able to rent your timeshare to others. You can also ‘swap’ or ‘bank’ your timeshare through timeshare websites.


Timeshare schemes are a type of managed fund. Generally this means that the scheme operator must hold an Australian financial services (AFS) licence, register the scheme with ASIC and must give you a product disclosure statement.

Before you buy into a timeshare program or scheme, check ASIC Connect’s Professional Registers to find out if the company managing the timeshare holds an AFS licence.


You will be required to pay a maintenance fee (usually annually) toward the upkeep of the property even if you don’t use the property. You may also have to pay a membership fee each year.

You need to pay these fees for the whole time you have a timeshare so check how long this is, it may be a very long time. If you don’t keep up with your payments, your timeshare might be forfeited and you may receive no money back.

Borrowing money to buy timeshares

Banks don’t generally lend money to buy into timeshare schemes. However you may be offered credit by a scheme operator or a credit provider associated with the scheme operator.

If you do plan to borrow money, check the credit provider is licensed by searching ASIC Connect’s Professional Registers.

Make sure you understand all the terms of the credit contract, including the financing repayments, and the cooling-off period, before you sign it.

Ultiqa Lifestyle timeshare loan refunds

Future Holiday Finance will refund up to $3 million because ASIC found that they signed people up to loans when they attended Ultiqa Lifestyle timeshare sales seminars, without first assessing if they could afford the loans or if the loans were right for them. Find out if you can get a refund of your Ultiqa Lifestyle timeshare loan

Timeshare seminars

If you’re going to a timeshare seminar remember:

  • You don’t have to sign on the dotted line on the day
  • You have the right to a 7-day cooling-off period after you sign. The cooling-off period is 14 days if the operator is not a member of the Australian Timeshare and Holiday Ownership Council (ATHOC)
  • You should carefully read the product disclosure statement you are given and understand the terms and costs before signing up

The product disclosure statement and application form that the scheme operator gives you should tell you the cooling-off period that applies. You will be asked to sign an acknowledgement that you have received the cooling-off statement.

If you don’t want to go ahead with the purchase, make sure you tell the company in writing before the end of the cooling-off period.

Take the time to consider the upfront and ongoing costs of the timeshare and compare these costs against alternative holiday arrangements. Timeshares usually only cover the accommodation portion of your holiday which is not a fair comparison to the total cost of a typical holiday that also includes travel, food, entertainment and other incidental costs.

See avoiding sales pressure for tips on how to deal with salespeople.

Case study: Jane and Riley change their minds about a timeshare

Couple assessing whether they should take part in a timeshare or not

Jane and Riley received a phone call from a timeshare operator offering them a free family holiday. They were told that all they needed to do was go to a short presentation with no obligation to buy. They attended the 4-hour presentation and decided to sign up for the timeshare program.

A few days later, Jane and Riley looked at the figures again. They realised that for a one-week holiday each year, they’d be paying an initial amount of $22,000; and on top of that they’d have to pay $500 a year in maintenance fees as well as a $100 yearly membership fee.

They worked out that over 10 years it would cost them $28,000, which was more than they had intended to spend on holidays in that time. As they were still within the cooling-off period, they emailed the timeshare operator and cancelled the contract.

Selling timeshares

Selling your timeshare may not be as easy as you think. Here are some things to consider before putting your timeshare up for sale:

  • Don’t expect a buyer or a profit – There are often a lot of timeshares available for sale and there may not be a lot of interested buyers, so you may not get as high a price as you’d like or be able to sell your timeshare at all.
  • Be creative in how you market it – Developers who sell timeshares spend lots of money on advertising, so you may need to think of innovative ways to compete with their marketing.
  • Get the price right – Check how much timeshares are selling for at the time you put yours on the market, so you know what a reasonable sale price is.

Dealing with problems

Timeshare operators must be members of an external dispute resolution scheme. If you have a dispute that involves a timeshare operator, see how to complain.

Timeshares best suit people who want to make a long-term commitment to the accommodation provided by the timeshare operator. If you are looking for an investment that will give you a financial return, consider other options. Timeshares are a long-term lifestyle choice, so make sure you think carefully before signing up.


Last updated: 09 Dec 2019


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